MeridianLink Reports Second Quarter 2024 Results

Second quarter revenue of $78.7 million grows 4% year-over-year driven by lending software solutions revenue of $61.6 million, reflecting growth of 11% year-over-year

COSTA MESA, Calif.--()--MeridianLink, Inc. (NYSE: MLNK), a leading provider of modern software platforms for financial institutions and consumer reporting agencies, today announced financial results for the second quarter ended June 30, 2024.

“Our second quarter performance highlights the resilience of our business model, continued demand for MeridianLink® One, and our disciplined execution as a leading vertical SaaS company,” said Nicolaas Vlok, chief executive officer of MeridianLink®. “Our lending software solutions continue to perform well in the face of macroeconomic headwinds due to the power of our platform. New and existing customers continue to partner with MeridianLink to execute a digital lending strategy that wins in the market.”

Quarterly Financial Highlights:

  • Revenue of $78.7 million, an increase of 4% year-over-year
  • Lending software solutions revenue of $61.6 million, an increase of 11% year-over-year
  • Operating loss of $(1.1) million, or (1)% of revenue, and non-GAAP operating income of $15.5 million, or 20% of revenue
  • Net loss of $(9.7) million, or (12)% of revenue, and adjusted EBITDA of $31.8 million, or 40% of revenue
  • Cash flows from operations of $14.4 million, or 18% of revenue, and free cash flow of $12.4 million, or 16% of revenue
  • MeridianLink returned $29.9 million to stockholders via 1.6 million of stock repurchases

Business and Operating Highlights:

  • MeridianLink named Larry Katz President of the Company and will welcome Elias Olmeta as our new Chief Financial Officer on August 26, 2024. Mr. Katz will continue to serve as Chief Financial Officer until Mr. Olmeta starts. With these leadership changes, we are enhancing our industry expertise and aligning our customer-facing organization to further scale the business.
  • New and existing customers chose MeridianLink One to enhance their lending solutions, including a MeridianLink® Consumer customer who adopted MeridianLink® Mortgage, Mortgage Access, and our Debt Optimization solution.
  • MeridianLink announced 3Rivers Federal Credit Union’s successful go-live on MeridianLink® Access and Opening, resulting in a significant decrease in loan application times.
  • We enhanced our product capabilities through a new integration between MeridianLink® Insight and Collect that provides customers with advanced analytics to run their businesses, including a new payment propensity index.
  • To offer our customers innovative AI capabilities, we partnered with Conductiv, a leader in providing missing, permissioned data to meet underwriting guidelines, helping customers achieve up to a 47% increase in approval rates without increasing losses.

Business Outlook

Based on information as of today, August 8, 2024, the Company issues third quarter financial guidance and updates full year 2024 financial guidance as follows:

Third Quarter Fiscal 2024:

  • Revenue is expected to be in the range of $78.0 to $81.0
  • Adjusted EBITDA is expected to be in the range of $30.0 to $33.0

Full Year 2024:

  • Revenue is expected to be in the range of $312.0 to $318.0
  • Adjusted EBITDA is expected to be in the range of $123.0 to $128.0

Conference Call Information

MeridianLink will hold a conference call to discuss its second quarter results today, August 8, 2024, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). The conference call can be accessed by dialing (800) 549-8228 from North America toll-free or the International number of (289) 819-1520 with Conference ID 49245. A live webcast of the conference call can be accessed from the investor relations page of MeridianLink’s website at ir.meridianlink.com. An archived replay of the webcast will be available at the same website following the conclusion of the call. A telephonic replay will be available until 8:59 p.m. Pacific Time (11:59 p.m. Eastern Time) on Thursday, August 15, 2024, by dialing (888) 660-6264 from North America or the International number of (289) 819-1325 with Playback Passcode 49245.

MeridianLink uses its investor relations website (https://ir.meridianlink.com), press releases, SEC filings, public conference calls and webcasts, blog posts on its website, as well as its social media channels, such as its LinkedIn page (www.linkedin.com/company/meridianlink), X (formerly Twitter) feed (@meridianlink), and Facebook page (www.facebook.com/MeridianLink/), as a means of disclosing material information and for complying with its disclosure obligations under Regulation FD. Information contained on or accessible through the websites is not incorporated by reference into this release, and links for these websites are inactive textual references only.

About MeridianLink

MeridianLink® (NYSE: MLNK) empowers financial institutions and consumer reporting agencies to drive efficient growth. MeridianLink’s cloud-based digital lending, account opening, background screening, and data verification software solutions leverage shared intelligence from a unified data platform, MeridianLink® One, to enable customers of all sizes to identify growth opportunities, effectively scale up, and support compliance efforts, all while powering an enhanced experience for staff and consumers alike.

For more than 25 years, MeridianLink has prioritized the democratization of lending for consumers, businesses, and communities. Learn more at www.meridianlink.com.

Non-GAAP Financial Measures

To supplement the financial measures presented in accordance with generally accepted accounting principles, or GAAP, we provide certain non-GAAP financial measures, such as adjusted EBITDA and adjusted EBITDA margin; non-GAAP operating income (loss); non-GAAP net income (loss); non-GAAP cost of revenue; non-GAAP sales and marketing expenses; non-GAAP research and development expenses; non-GAAP general and administrative expenses; and free cash flow. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Rather, we believe that these non-GAAP financial measures, when viewed in addition to and not in lieu of our reported GAAP financial results, provide investors with additional meaningful information to assess our financial performance and trends, enable comparison of financial results between periods, and allow for greater transparency with respect to key metrics utilized internally in analyzing and operating our business. The following definitions are provided:

  • Non-GAAP operating income (loss): GAAP operating income (loss), excluding the impact of share-based compensation, employer payroll taxes on employee stock transactions, expenses associated with our secondary offering, restructuring related costs, expenses related to debt modification, charges in connection with litigation unrelated to our core business, and sponsor and third-party acquisition-related costs.

  • Non-GAAP net income (loss): GAAP net income (loss), excluding the impact of share-based compensation, employer payroll taxes on employee stock transactions, expenses associated with our secondary offering, restructuring related costs, expenses related to debt modification, charges in connection with litigation unrelated to our core business, and the effect of income taxes, including the partial valuation allowance, on non-GAAP items. The effects of income taxes on non-GAAP items reflect a fixed long-term projected tax rate of 24%.

    The Company employs a structural long-term projected non-GAAP income tax rate of 24% for greater consistency across reporting periods, eliminating effects of items not directly related to the Company's operating structure that may vary in size and frequency. This long-term projected non-GAAP income tax rate is determined by analyzing a mix of historical and projected tax filing positions, assumes no additional acquisitions during the projection period or include the impact from the partial deferred tax asset valuation allowance, and takes into account various factors, including the Company’s anticipated tax structure, its tax positions in different jurisdictions, and current impacts from key U.S. legislation where the Company operates. We will reevaluate this tax rate, as necessary, for significant events such as significant alterations in the U.S. tax environment, substantial changes in the Company’s geographic earnings mix due to acquisition activity, or other shifts in the Company’s strategy or business operations.

  • Adjusted EBITDA: net income (loss) before interest expense, taxes, depreciation and amortization, share-based compensation expense, employer payroll taxes on employee stock transactions, expenses associated with our secondary offering, restructuring related costs, expenses related to debt modification, charges in connection with litigation unrelated to our core business, and deferred revenue reductions from purchase accounting for acquisitions prior to the adoption of ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,” which we early adopted on January 1, 2022 on a prospective basis. Deferred revenue from acquisitions prior to the adoption of ASU 2021-08 was recognized on a straight line basis through December 31, 2023.

  • Non-GAAP cost of revenue: GAAP cost of revenue, excluding the impact of share-based compensation, employer payroll taxes on employee stock transactions, and amortization of developed technology.

  • Non-GAAP operating expenses: GAAP operating expenses, excluding the impact of share-based compensation, employer payroll taxes on employee stock transactions, expenses associated with our secondary offering, expenses related to debt modification, expenses related to debt modification, charges in connection with litigation unrelated to our core business, and depreciation and amortization, as applicable.

  • Free cash flow: GAAP cash flow from operating activities less GAAP purchases of property and equipment (Capital Expenditures) and capitalized costs related to developed technology (Capitalized Software).

Reconciliations to comparable GAAP financial measures are available in the accompanying schedules, which are posted as part of this earnings release on our website. No reconciliation is provided with respect to certain forward-looking non-GAAP financial measures as the GAAP measures are not accessible on a forward-looking basis. We cannot reliably predict all necessary components or their impact to reconcile such financial measures without unreasonable effort. The events necessitating a non-GAAP adjustment are inherently unpredictable and may have a significant impact on our future GAAP financial results.

Forward-Looking Statements

This release contains, and our above-referenced conference call and webcast will contain, statements which are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Generally, these statements can be identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and variations of such words or similar expressions, although not all forward-looking statements contain these identifying words. Further, statements describing our strategy, outlook, guidance, plans, intentions, or goals are also forward-looking statements. These forward-looking statements reflect our predictions, expectations, or forecasts, including, but not limited to, statements regarding, and guidance with respect to, our strategy, our future financial and operational performance, future economic and market conditions, our strategic initiatives, our leadership transition and plans, our stock repurchase programs, including the execution and amount of repurchases, the status of litigation matters, including expected or contemplated settlements, associated timing, and estimated fees and expenses, our ability to retain and attract customers and product partners, the benefit to us and our customers of integrations with our product partners, our development or delivery of new or enhanced solutions and anticipated results of those solutions for our customers, our ability to effectively implement, integrate, and service our customers, our market size and growth opportunities, our competitive positioning, projected costs, technological capabilities and plans, and objectives of management. Actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, risks related to our business and industry, as well as those set forth in Item 1A. Risk Factors, or elsewhere, in our Annual Report on Form 10-K for the most recently ended fiscal year, any updates in our Quarterly Reports on Form 10-Q filed for periods subsequent to such Form 10-K, and our other SEC filings. These forward-looking statements are based on reasonable assumptions as of the date hereof. The plans, intentions, or expectations disclosed in our forward-looking statements may not be achieved, and you should not rely upon forward-looking statements as predictions of future events. We undertake no obligation, other than as required by applicable law, to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands, except share and per share data)

 

 

As of

 

June 30, 2024

 

December 31, 2023

 

 

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

93,009

 

 

$

80,441

 

Accounts receivable, net

 

35,924

 

 

 

32,412

 

Prepaid expenses and other current assets

 

11,323

 

 

 

11,574

 

Total current assets

 

140,256

 

 

 

124,427

 

Property and equipment, net

 

2,664

 

 

 

3,337

 

Right of use assets, net

 

806

 

 

 

1,140

 

Intangible assets, net

 

226,525

 

 

 

251,060

 

Goodwill

 

610,063

 

 

 

610,063

 

Other assets

 

6,622

 

 

 

6,224

 

Total assets

$

986,936

 

 

$

996,251

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

6,035

 

 

$

4,405

 

Accrued liabilities

 

30,608

 

 

 

30,673

 

Deferred revenue

 

28,337

 

 

 

17,224

 

Current portion of debt, net of debt issuance costs

 

3,768

 

 

 

3,542

 

Total current liabilities

 

68,748

 

 

 

55,844

 

Debt, net of debt issuance costs

 

467,073

 

 

 

420,004

 

Deferred tax liabilities, net

 

10,928

 

 

 

10,823

 

Long-term deferred revenue

 

261

 

 

 

792

 

Other long-term liabilities

 

390

 

 

 

541

 

Total liabilities

$

547,400

 

 

$

488,004

 

Commitments and contingencies

 

 

 

Stockholders’ Equity:

 

 

 

Preferred stock, $0.001 par value; 50,000,000 shares authorized; zero shares issued and outstanding at June 30, 2024 and December 31, 2023

 

 

 

 

 

Common stock, $0.001 par value; 600,000,000 shares authorized, 75,773,928 and 78,447,701 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

 

126

 

 

 

129

 

Additional paid-in capital

 

675,191

 

 

 

654,634

 

Accumulated deficit

 

(235,781

)

 

 

(146,516

)

Total stockholders’ equity

 

439,536

 

 

 

508,247

 

Total liabilities and stockholders’ equity

$

986,936

 

 

$

996,251

 

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except share and per share data)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2024

 

2023

 

2024

 

2023

Revenues, net

$

78,676

 

 

$

75,415

 

 

$

156,492

 

 

$

152,550

 

Cost of revenues:

 

 

 

 

 

 

 

Subscription and services

 

23,373

 

 

 

23,984

 

 

 

44,717

 

 

 

47,485

 

Amortization of developed technology

 

4,803

 

 

 

4,510

 

 

 

9,532

 

 

 

8,964

 

Total cost of revenues

 

28,176

 

 

 

28,494

 

 

 

54,249

 

 

 

56,449

 

Gross profit

 

50,500

 

 

 

46,921

 

 

 

102,243

 

 

 

96,101

 

Operating expenses:

 

 

 

 

 

 

 

General and administrative

 

29,237

 

 

 

24,409

 

 

 

54,416

 

 

 

46,964

 

Research and development

 

9,905

 

 

 

11,754

 

 

 

19,390

 

 

 

25,566

 

Sales and marketing

 

11,467

 

 

 

8,558

 

 

 

22,003

 

 

 

16,771

 

Restructuring related costs

 

988

 

 

 

717

 

 

 

4,179

 

 

 

3,621

 

Total operating expenses

 

51,597

 

 

 

45,438

 

 

 

99,988

 

 

 

92,922

 

Operating (loss) income

 

(1,097

)

 

 

1,483

 

 

 

2,255

 

 

 

3,179

 

Other (income) expense, net:

 

 

 

 

 

 

 

Interest and other income

 

(1,636

)

 

 

(784

)

 

 

(2,592

)

 

 

(1,254

)

Interest expense

 

9,797

 

 

 

9,316

 

 

 

19,379

 

 

 

18,347

 

Total other expense, net

 

8,161

 

 

 

8,532

 

 

 

16,787

 

 

 

17,093

 

Loss before income taxes

 

(9,258

)

 

 

(7,049

)

 

 

(14,532

)

 

 

(13,914

)

Provision for (benefit from) income taxes

 

412

 

 

 

(1,819

)

 

 

444

 

 

 

(3,018

)

Net loss

$

(9,670

)

 

$

(5,230

)

 

$

(14,976

)

 

$

(10,896

)

 

 

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

 

Basic

$

(0.13

)

 

$

(0.06

)

 

$

(0.19

)

 

$

(0.13

)

Diluted

$

(0.13

)

 

$

(0.06

)

 

$

(0.19

)

 

$

(0.13

)

Weighted average common stock outstanding:

 

 

 

 

 

 

 

Basic

 

76,527,803

 

 

 

80,911,113

 

 

 

76,923,824

 

 

 

80,786,427

 

Diluted

 

76,527,803

 

 

 

80,911,113

 

 

 

76,923,824

 

 

 

80,786,427

 

Net Revenues by Major Source

(unaudited)

(in thousands)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2024

 

2023

 

2024

 

2023

Subscription fees

$

65,946

 

$

63,770

 

$

131,858

 

$

130,175

Professional services

 

9,559

 

 

 

9,002

 

 

 

18,569

 

 

 

17,437

 

Other

 

3,171

 

 

 

2,643

 

 

 

6,065

 

 

 

4,938

 

Total

$

78,676

 

 

$

75,415

 

 

$

156,492

 

 

$

152,550

 

Net Revenues by Solution Type

(unaudited)

(in thousands)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2024

 

2023

 

2024

 

2023

Lending software solutions

$

61,644

 

 

$

55,778

 

$

122,547

 

 

$

113,779

Data verification software solutions

 

17,032

 

 

 

19,637

 

 

 

33,945

 

 

 

38,771

 

Total

$

78,676

 

 

$

75,415

 

 

$

156,492

 

 

$

152,550

 

% Growth attributable to:

 

 

 

 

 

 

 

Lending software solutions

 

8

%

 

 

 

 

6

%

 

 

Data verification software

 

(4

)%

 

 

 

 

(3

)%

 

 

Total % growth

 

4

%

 

 

 

 

3

%

 

 

___________

 

 

 

 

 

 

 

Percent Revenue Related to the Mortgage Loan Market

(unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2024

 

2023

 

2024

 

2023

Lending software solutions

10%

 

13%

 

11%

 

12%

Data verification software

55%

 

61%

 

56%

 

61%

Total % revenue related to mortgage loan market

20%

 

26%

 

20%

 

25%

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

 

 

Six Months Ended June 30,

 

2024

 

2023

Cash flows from operating activities:

 

 

 

Net loss

$

(14,976

)

 

$

(10,896

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

29,096

 

 

 

28,955

 

Provision for expected credit losses

 

561

 

 

 

441

 

Amortization of debt issuance costs

 

464

 

 

 

669

 

Share-based compensation expense

 

20,429

 

 

 

13,893

 

Deferred income taxes

 

105

 

 

 

(4,192

)

Loss on disposal of property and equipment

 

6

 

 

 

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

Accounts receivable

 

(4,073

)

 

 

(2,640

)

Prepaid expenses and other assets

 

(197

)

 

 

(2,395

)

Accounts payable

 

1,675

 

 

 

2,955

 

Accrued liabilities

 

(277

)

 

 

(1,663

)

Deferred revenue

 

10,581

 

 

 

9,058

 

Net cash provided by operating activities

 

43,394

 

 

 

34,185

 

Cash flows from investing activities:

 

 

 

Capitalized software additions

 

(3,684

)

 

 

(4,562

)

Purchases of property and equipment

 

(152

)

 

 

(305

)

Return of escrow deposit

 

 

 

 

30,000

 

Acquisition, net of cash acquired – Beanstalk Networks LLC

 

 

 

 

326

 

Net cash (used in) provided by investing activities

 

(3,836

)

 

 

25,459

 

Cash flows from financing activities:

 

 

 

Repurchases of common stock

 

(73,788

)

 

 

(5,145

)

Proceeds from exercise of stock options

 

722

 

 

 

1,025

 

Proceeds from employee stock purchase plan

 

944

 

 

 

793

 

Taxes paid related to net share settlement of restricted stock units

 

(1,676

)

 

 

(1,050

)

Principal payments of debt

 

(2,278

)

 

 

(2,175

)

Payments of deferred offering costs

 

(74

)

 

 

 

Proceeds from debt

 

50,000

 

 

 

 

Payments of debt issuance costs

 

(840

)

 

 

 

Net cash used in financing activities

 

(26,990

)

 

 

(6,552

)

Net increase in cash and cash equivalents

 

12,568

 

 

 

53,092

 

Cash and cash equivalents, beginning of period

 

80,441

 

 

 

55,780

 

Cash and cash equivalents, end of period

$

93,009

 

 

$

108,872

 

 

Supplemental disclosures of cash flow information:

 

 

 

Cash paid for interest

$

18,893

 

 

$

17,955

 

Cash paid for income taxes

 

433

 

 

 

2,577

 

Non-cash investing and financing activities:

 

 

 

Shares withheld with respect to net settlement of restricted stock units

 

1,676

 

 

 

 

Excise taxes payable included in repurchases of common stock

 

505

 

 

 

 

Share-based compensation expense included in capitalized software additions

 

138

 

 

 

136

 

Purchase price allocation adjustment related to income tax effects for StreetShares acquisition

 

 

 

 

245

 

Purchases of property and equipment included in accounts payable and accrued liabilities

 

 

 

 

3

 

Vesting of restricted stock awards and restricted stock units

 

1

 

 

 

5

 

Reconciliation from GAAP to Non-GAAP Results

(unaudited)

(in thousands, except share and per share data)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2024

 

2023

 

2024

 

2023

Operating (loss) income

$

(1,097

)

 

$

1,483

 

 

$

2,255

 

 

$

3,179

 

Add: Share-based compensation expense

 

12,500

 

 

 

9,367

 

 

 

20,436

 

 

 

14,556

 

Add: Employer payroll taxes on employee stock transactions

 

508

 

 

 

322

 

 

 

930

 

 

 

448

 

Add: Expenses associated with public offering

 

308

 

 

 

 

 

 

1,698

 

 

 

 

Add: Litigation-related charges

 

1,864

 

 

 

 

 

 

1,864

 

 

 

 

Add: Expenses related to debt modification

 

473

 

 

 

 

 

 

473

 

 

 

 

Add: Restructuring related costs(2)

 

988

 

 

 

717

 

 

 

4,179

 

 

 

3,621

 

Non-GAAP operating income

$

15,544

 

 

$

11,889

 

 

$

31,835

 

 

$

21,804

 

Operating margin

 

(1

)%

 

 

2

%

 

 

1

%

 

 

2

%

Non-GAAP operating margin

 

20

%

 

 

16

%

 

 

20

%

 

 

14

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2024

 

2023

 

2024

 

2023

Net loss

$

(9,670

)

 

$

(5,230

)

 

$

(14,976

)

 

$

(10,896

)

Add: Share-based compensation expense

 

12,500

 

 

 

9,367

 

 

 

20,436

 

 

 

14,556

 

Add: Employer payroll taxes on employee stock transactions

 

508

 

 

 

322

 

 

 

930

 

 

 

448

 

Add: Expenses associated with public offering

 

308

 

 

 

 

 

 

1,698

 

 

 

 

Add: Litigation-related charges

 

1,864

 

 

 

 

 

 

1,864

 

 

 

 

Add: Expenses related to debt modification

 

473

 

 

 

 

 

 

473

 

 

 

 

Add: Restructuring related costs(2)

 

988

 

 

 

717

 

 

 

4,179

 

 

 

3,621

 

Subtract: Income tax effect on non-GAAP items

 

(3,994

)

 

 

(2,497

)

 

 

(7,099

)

 

 

(4,470

)

Non-GAAP net income

$

2,977

 

 

$

2,679

 

 

$

7,505

 

 

$

3,259

 

Non-GAAP basic net income per share

$

0.04

 

 

$

0.03

 

 

$

0.10

 

 

$

0.04

 

Non-GAAP diluted net income per share

$

0.04

 

 

$

0.03

 

 

$

0.09

 

 

$

0.04

 

Weighted average shares used to compute Non-GAAP basic net income per share

 

76,527,803

 

 

 

80,911,113

 

 

 

76,923,824

 

 

 

80,786,427

 

Weighted average shares used to compute Non-GAAP diluted net

 

79,291,173

 

 

 

83,487,132

 

 

 

80,020,336

 

 

 

82,994,599

 

Net loss margin

 

(12

)%

 

 

(7

)%

 

 

(10

)%

 

 

(7

)%

Non-GAAP net income margin

 

4

%

 

 

4

%

 

 

5

%

 

 

2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2024

 

2023

 

2024

 

2023

Net loss

$

(9,670

)

 

$

(5,230

)

 

$

(14,976

)

 

$

(10,896

)

Interest expense

 

9,797

 

 

 

9,316

 

 

 

19,379

 

 

 

18,347

 

Taxes

 

412

 

 

 

(1,819

)

 

 

444

 

 

 

(3,018

)

Depreciation and amortization

 

14,573

 

 

 

14,424

 

 

 

29,096

 

 

 

28,955

 

Share-based compensation expense

 

12,500

 

 

 

9,367

 

 

 

20,436

 

 

 

14,556

 

Employer payroll taxes on employee stock transactions

 

508

 

 

 

322

 

 

 

930

 

 

 

448

 

Expenses associated with public offering

 

308

 

 

 

 

 

 

1,698

 

 

 

 

Litigation-related charges(1)

 

1,864

 

 

 

 

 

 

1,864

 

 

 

 

Expenses related to debt modification

 

473

 

 

 

 

 

 

473

 

 

 

 

Restructuring related costs(2)

 

988

 

 

 

717

 

 

 

4,179

 

 

 

3,621

 

Deferred revenue reduction from purchase accounting for acquisitions prior to 2022

 

 

 

 

19

 

 

 

 

 

 

39

 

Adjusted EBITDA

$

31,753

 

 

$

27,116

 

 

$

63,523

 

 

$

52,052

 

Net loss margin

 

(12

)%

 

 

(7

)%

 

 

(10

)%

 

 

(7

)%

Adjusted EBITDA margin

 

40

%

 

 

36

%

 

 

41

%

 

 

34

%

 

(1) Litigation-related charges pertains to litigation settlements and related legal fees. During the three months ended June 30, 2024, $1.5 million relates to estimated settlements of class action lawsuits and $0.4 million relates to third-party legal fees directly related to the settlements.

(2) Restructuring related costs for the three months ended June 30, 2024 and 2023 are inclusive of net acceleration (forfeitures) of share-based compensation associated with restructuring in the amount of $0.1 million and ($0.4 million), respectively, and for the six months ended June 30, 2024 and 2023 $0.0 million and ($0.7 million), respectively.

Reconciliation from GAAP to Non-GAAP Results

(unaudited)

(in thousands)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2024

 

2023

 

2024

 

2023

Cost of revenue

$

28,176

 

 

$

28,494

 

 

$

54,249

 

 

$

56,449

 

Less: Share-based compensation expense

 

1,363

 

 

 

1,157

 

 

 

2,145

 

 

 

2,009

 

Less: Employer payroll taxes on employee stock transactions

 

97

 

 

 

88

 

 

 

144

 

 

 

109

 

Less: Amortization of developed technology

 

4,803

 

 

 

4,510

 

 

 

9,532

 

 

 

8,964

 

Non-GAAP cost of revenue

$

21,913

 

 

$

22,739

 

 

$

42,428

 

 

$

45,367

 

Cost of revenue as a % of revenue

 

36

%

 

 

38

%

 

 

35

%

 

 

37

%

Non-GAAP cost of revenue as a % of revenue

 

28

%

 

 

30

%

 

 

27

%

 

 

30

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2024

 

2023

 

2024

 

2023

General and administrative

$

29,237

 

 

$

24,409

 

 

$

54,416

 

 

$

46,964

 

Less: Share-based compensation expense

 

6,792

 

 

 

5,231

 

 

 

11,185

 

 

 

7,494

 

Less: Employer payroll taxes on employee stock transactions

 

206

 

 

 

107

 

 

 

343

 

 

 

158

 

Less: Expenses associated with public offering

 

308

 

 

 

 

 

 

1,698

 

 

 

 

Less: Litigation-related charges

 

1,864

 

 

 

 

 

 

1,864

 

 

 

 

Less: Expenses related to debt modification

 

473

 

 

 

 

 

 

473

 

 

 

 

Less: Depreciation expense

 

363

 

 

 

495

 

 

 

739

 

 

 

990

 

Less: Amortization of intangibles

 

9,407

 

 

 

9,419

 

 

 

18,825

 

 

 

19,001

 

Non-GAAP general & administrative

$

9,824

 

 

$

9,157

 

 

$

19,289

 

 

$

19,321

 

General and administrative as a % of revenue

 

37

%

 

 

32

%

 

 

35

%

 

 

31

%

Non-GAAP general and administrative as a % of revenue

 

12

%

 

 

12

%

 

 

12

%

 

 

13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2024

 

2023

 

2024

 

2023

Research and development

$

9,905

 

 

$

11,754

 

 

$

19,390

 

 

$

25,566

 

Less: Share-based compensation expense

 

2,531

 

 

 

1,875

 

 

 

4,033

 

 

 

3,658

 

Less: Employer payroll taxes on employee stock transactions

 

125

 

 

 

97

 

 

 

246

 

 

 

125

 

Non-GAAP research and development

$

7,249

 

 

$

9,782

 

 

$

15,111

 

 

$

21,783

 

Research and development as a % of revenue

 

13

%

 

 

16

%

 

 

12

%

 

 

17

%

Non-GAAP research and development as a % of revenue

 

9

%

 

 

13

%

 

 

10

%

 

 

14

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2024

 

2023

 

2024

 

2023

Sales and marketing

$

11,467

 

 

$

8,558

 

 

$

22,003

 

 

$

16,771

 

Less: Share-based compensation expense

 

1,814

 

 

 

1,104

 

 

 

3,073

 

 

 

1,395

 

Less: Employer payroll taxes on employee stock transactions

 

80

 

 

 

30

 

 

 

197

 

 

 

56

 

Non-GAAP sales and marketing

$

9,573

 

 

$

7,424

 

 

$

18,733

 

 

$

15,320

 

Sales and marketing as a % of revenue

 

15

%

 

 

11

%

 

 

14

%

 

 

11

%

Non-GAAP sales and marketing as a % of revenue

 

12

%

 

 

10

%

 

 

12

%

 

 

10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2024

 

2023

 

2024

 

2023

Net cash provided by operating activities

$

14,356

 

 

$

6,104

 

 

$

43,394

 

 

$

34,185

 

Less: Capitalized software

 

1,847

 

 

 

2,638

 

 

 

3,684

 

 

 

4,562

 

Less: Capital expenditures

 

60

 

 

 

171

 

 

 

152

 

 

 

305

 

Free cash flow

$

12,449

 

 

$

3,295

 

 

$

39,558

 

 

$

29,318

 

Net cash provided by operating actives as a % of revenue

 

18

%

 

 

8

%

 

 

28

%

 

 

22

%

Free cash flow as a % of revenue

 

16

%

 

 

4

%

 

 

25

%

 

 

19

%

 

Contacts

Press Contact
Sydney Wishnow
(508) 808-9060
meridianlinkPR@clyde.us

Investor Relations Contact
Gianna Rotellini
(714) 332-6357
InvestorRelations@meridianlink.com

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Contacts

Press Contact
Sydney Wishnow
(508) 808-9060
meridianlinkPR@clyde.us

Investor Relations Contact
Gianna Rotellini
(714) 332-6357
InvestorRelations@meridianlink.com